ETFS Rolls Out Asian Gold ETF In US

January 14, 2011

ETFS launches the first U.S.-listed physical gold ETF to be vaulted in Asia.

ETF Securities, the London-based firm specializing in physically backed metals exchange-traded funds, today launched the first U.S.-listed physical gold ETF with its holdings vaulted in Asia. The launch brings to seven the number of physical precious metals exchange-traded funds it is offering U.S. investors.

The ETFS Physical Asian Gold Shares ETF (NYSEArca: AGOL) will hold its gold in Singapore, enabling investors to diversify their physical gold holdings to different locations around the world. ETFS already sponsors the ETFS Physical Swiss Gold Shares ETF (NYSEArca: SGOL), which holds its gold in Switzerland. London, New York and Toronto are also places where gold in other physical ETFs is stored.

“The importance of Singapore being a location for custody is that Singapore is often the gateway to Asia and, like Switzerland, is widely considered a neutral country,” Fred Jheon, managing director of product development at ETF Securities, said in a telephone conference before the ETF launching.

Interest in gold has soared in the past decade as part of a general boom in commodities. Investors have also flocked to gold amid concerns that developed nations including the U.S. are stoking inflationary pressures with unprecedented monetary-policy measures designed to lift the global economy out of its worst slump since the 1930s. The SPDR Gold Shares (NYSEArca: GLD), the biggest physical gold ETF by far, has risen in price by more than 20 percent in the past year.

GLD, the second-biggest ETF in the world, had assets of $56.18 billion as of Jan. 13. By comparison, SGOL had $1.33 billion and the iShares Gold Trust (NYSEArca: IAU) had $5.20 billion, according to data compiled by IndexUniverse.com.

AGOL, like SGOL, will have an annual expense ratio of 0.39 percent. That’s less than GLD’s 0.40 percent expense, but more than IAU’s 0.25 percent.

GLD vaults its gold in London, while IAU stores its holdings in London, New York and Toronto. ETFS said J.P. Morgan Chase will serve as AGOL’s custodian.

Apart from AGOL and SGOL, ETFS’ other five precious metals ETFs on the U.S. market and their expense ratios are:

  • The ETFS Physical Precious Metals Basket Shares (NYSEArca: GLTR), an ETF that combines gold, silver, platinum and palladium: 0.60 percent
  • The ETFS Physical White Metals Basket Shares (NYSEArca: WITE), an ETF that combines the so-called white metals silver, platinum and palladium: 0.60 percent
  • The ETFS Physical Silver Shares (NYSEArca: SIVR): 0.30 percent
  • The ETFS Physical Platinum Shares (NYSEArca: PPLT): 0.60 percent
  • ETFS Physical Palladium Shares (NYSEArca: PALL): 0.60 percent

 

As of yesterday, its U.S.-listed products had together gathered a total of $3.56 billion in assets.

 

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